QS Holdco claims new evidence for antitrust case
05 September 2019 New York
Image: Shutterstock
QS Holdco is seeking to re-open its antitrust complaint against some of the largest members of the securities lending market in order to present new facts that it believes will alter the opinion of the court that dismissed its case in August.
In January, QS Holdco originally filed an antitrust lawsuit in the US District Court for the Southern District of New York, asserting that several brokers, including Bank of America, Goldman Sachs and Merrill Lynch, along with EquiLend, boycotted it’s formerly owned securities lending platform, AQS.
In the filing, QS Holdco claimed to be “the victim of a conspiracy by defendants to boycott a stock lending platform that it developed and owned”.
It argued that the defendants were threatened by its AQS electronic trading platform as it offered transparent pricing, central clearing and the ability for parties to trade directly without a prime broker acting as a “gatekeeping middlemen”.
QS Holdco further alleged that the defendants conspired to boycott and eliminate the platform.
However, the complaint was dismissed by US circuit judge Richard Sullivan on 7 August on the grounds that the claims no longer belong to the company that brought them.
Judge Sullivan agreed with the defendant's argument that all claims were assigned from Quadriserv, the parent company of QS Holdco, to EquiLend in 2016 when the latter purchased AQS for $5 million.
This week, QS Holdco has filed a memorandum of law in support of its motion to dismiss the previous ruling and submit new evidence, which claims that EquiLend knew of the alleged “boycott conspiracy” in 2009 and therefore knowingly took away its antitrust claims as part of the purchase.
QS Holdco claims to now hold “specific facts” to show that it was not aware of the alleged conspiracy until 16 August 2017, when the complaint was filed in the securities lending class action before Judge Failla, Iowa Public Employees’ Retirement System v. Bank of America.
By way of evidence for this claim the latest filing noted: “the complaint revealed to the QS Holdco principals for the first time that in January 2016, Thomas Wipf of Morgan Stanley and William Conley of Goldman Sachs had discussed how to “get a hold of this thing”–referring specifically to AQS”.
“The context of this communication, as the QS Holdco principals also learned for the first time in 2017, was an agreement between Morgan Stanley and Goldman Sachs to launch ‘Project Gateway,’ a scheme whose main purpose was to use EquiLend to acquire the assets of AQS, shut down AQS’s operations, and extinguish all claims of the prior owners of AQS as part of Defendants’ conspiracy,” the court filing continued.
EquiLend was not immediately able to comment on the claims.
In January, QS Holdco originally filed an antitrust lawsuit in the US District Court for the Southern District of New York, asserting that several brokers, including Bank of America, Goldman Sachs and Merrill Lynch, along with EquiLend, boycotted it’s formerly owned securities lending platform, AQS.
In the filing, QS Holdco claimed to be “the victim of a conspiracy by defendants to boycott a stock lending platform that it developed and owned”.
It argued that the defendants were threatened by its AQS electronic trading platform as it offered transparent pricing, central clearing and the ability for parties to trade directly without a prime broker acting as a “gatekeeping middlemen”.
QS Holdco further alleged that the defendants conspired to boycott and eliminate the platform.
However, the complaint was dismissed by US circuit judge Richard Sullivan on 7 August on the grounds that the claims no longer belong to the company that brought them.
Judge Sullivan agreed with the defendant's argument that all claims were assigned from Quadriserv, the parent company of QS Holdco, to EquiLend in 2016 when the latter purchased AQS for $5 million.
This week, QS Holdco has filed a memorandum of law in support of its motion to dismiss the previous ruling and submit new evidence, which claims that EquiLend knew of the alleged “boycott conspiracy” in 2009 and therefore knowingly took away its antitrust claims as part of the purchase.
QS Holdco claims to now hold “specific facts” to show that it was not aware of the alleged conspiracy until 16 August 2017, when the complaint was filed in the securities lending class action before Judge Failla, Iowa Public Employees’ Retirement System v. Bank of America.
By way of evidence for this claim the latest filing noted: “the complaint revealed to the QS Holdco principals for the first time that in January 2016, Thomas Wipf of Morgan Stanley and William Conley of Goldman Sachs had discussed how to “get a hold of this thing”–referring specifically to AQS”.
“The context of this communication, as the QS Holdco principals also learned for the first time in 2017, was an agreement between Morgan Stanley and Goldman Sachs to launch ‘Project Gateway,’ a scheme whose main purpose was to use EquiLend to acquire the assets of AQS, shut down AQS’s operations, and extinguish all claims of the prior owners of AQS as part of Defendants’ conspiracy,” the court filing continued.
EquiLend was not immediately able to comment on the claims.
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